Business law question a customer purchases insurance from a


Business Law question: A customer purchases insurance from a State Farm Agent to cover business property in his office. The agent sells only State Farm insurance and her office has many State Farm logos and brochures. The customer asks for insurance sufficient to cover computer equipment that is worth $25,000. The agent states that the insurance policy she recommends with cover the computer equipment and the customer fills out the application and pays the premium. About 6 months later there is a fire in the office and all of the computer equipment is destroyed. The customer makes a claim and finds that the policy coverage for computer equipment is limited to $5,000. Does State Farm have pay $25,000 for the computer loss or only $5,000? Explain the legal basis for your answer.

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